A final pay is the only payslip most employers get wrong in both directions at once. It bundles components that attract superannuation with components that never did, and payroll systems left on defaults routinely superannuate the wrong lines: super paid on unused leave payouts that never required it, super missed on notice payments that always did. Under Payday Super the stakes tightened, because a termination pay date is a QE day with its own clock: the contribution is due within 7 business days of the termination payment. That own-clock treatment is why terminations differ from ordinary bonuses. Out-of-cycle bonuses fold into the next regular payday; a terminated employee has no next regular payday, so the final pay date is the operative QE day. This guide splits the final pay into its components, shows the worked numbers, and sets out the termination checklist that keeps the last payday as compliant as all the ones before it.
Published: July 2026
Nothing about termination changes the earnings base. Superannuation is payable on qualifying earnings, whose core is ordinary time earnings, and the reform that introduced QE left the scope of the OTE exclusions unchanged. So the question for every line of a final pay is the same question payroll answers every other week: is this payment ordinary time earnings, or is it something else? The termination context just concentrates an unusual number of “something else” payments into a single payslip, which is where the errors breed.
For the broader Payday Super timing rules, see our Payday Super guide and what the super guarantee costs employers, plus the ATO Payday Super pages. Final-pay mechanics also sit inside how to calculate final pay in Australia and termination of employment: a comprehensive guide. Classification of OTE components still follows SGR 2009/2 style reasoning on what is ordinary time earnings.
The pattern behind the list: payments that substitute for working ordinary hours attract super; payments that compensate for the ending itself, or convert unused entitlements to cash at the exit, do not.
Before processing any final pay, label each line as work substitute or exit compensation. Work substitutes attract SG. Exit compensation and leave cash-outs at termination generally do not. If a line is unclear, stop and take advice rather than guessing with a default code.
An operations coordinator on $93,600 a year, $1,800 a week, is made redundant with immediate effect. The final pay assembles four components.
Three weeks of ordinary hours worked since the last pay run: $5,400, attracts super of $648. Four weeks’ payment in lieu of notice: $7,200, attracts super of $864. Unused annual leave paid out: $6,300, no super. Genuine redundancy pay of eight weeks: $14,400, no super.
The final payment totals $33,300, of which exactly $12,600 is qualifying earnings, carrying $1,512 of super due in the employee’s fund within 7 business days of the termination pay date. A payroll that superannuated the whole payment would overpay by about $2,480 into a fund it cannot easily claw back from; a payroll that superannuated none of it would start a shortfall clock on $1,512 with notional earnings accruing daily and administrative uplift exposure behind it. Both errors come from the same cause: treating the final pay as one payment instead of four.
A sales manager on $160,000 resigns with four weeks paid in lieu and $12,000 of unused annual leave cashed out, plus $6,000 of ordinary hours since the last run. Super attaches to ordinary hours ($720) and in-lieu (about $1,477), not to the leave cash-out. Total SG about $2,200 on that final pay, due inside 7 business days of the off-cycle payment, not with the next scheduled super batch.
Terminations do not consult the payroll calendar. People resign on Tuesdays, are dismissed on Fridays, and finish mid-cycle, which makes the termination payment the most common off-cycle QE day most businesses will ever run. Every one starts its own 7 business day clock for the super on the OTE components, with the same shortfall and uplift machinery as a scheduled payday, and none of the muscle memory that protects the scheduled ones.
Two further wrinkles earn a mention. Large in-lieu payments can concentrate a surprising super amount into a single contribution, so the payment authorisation should never wait for the next scheduled super run; it goes the day the final pay does. And for high earners, sizeable final payments interact with the maximum super contribution base, which now operates as a single annual threshold rather than a quarterly one, smoothing the treatment of one-off spikes; the annual test means a big final payment no longer escapes super merely by landing in one quarter.
Pair STP reporting with the payment: the off-cycle pay event must be lodged on or before the payment so the liability record matches reality. See the Single Touch Payroll complete guide. Use the estimate your super contributions tool for the OTE components and a final-pay checklist for the rest.
Because terminations are irregular by nature, the fix is a standing checklist rather than a habit. Five lines cover the super dimension.
The last point deserves its own sentence: departed employees are the highest-risk population for stale fund details and the lowest-visibility population for complaints, right up until they check their fund app months later and call the Fair Work Ombudsman rather than a business they no longer work for. The week-one reconciliation is what prevents that call. Super is also an NES entitlement, so late final-pay super is a workplace-law issue as well as a tax one; see understanding and using the Fair Work system.
Final pays sit at the intersection of payroll, employment law and superannuation, land at unpredictable times, and are precisely the kind of irregular, high-stakes event that a documented process, or an embedded finance services team running one, handles identically every time while a busy owner handles it differently each time. People process and exit interviews sit in people and HR support. For leave liability context before exits, see the annual leave liability estimator.
Overpay risk: treating the whole final pay as superable. Difficult recovery from funds.
Underpay risk: treating all termination lines as super-free, especially in-lieu of notice. Shortfall clocks start immediately.
Classify first: componentise, code correctly, pay SG only on OTE components, reconcile confirmations within a week.
Is super payable on a final pay?
On parts of it. The ordinary hours worked up to termination and any payment in lieu of notice attract super; unused annual leave and long service leave paid out at termination, genuine redundancy payments and other employment termination payments do not.
Does payment in lieu of notice attract super?
Yes. It substitutes for ordinary hours the employee would have worked through the notice period, so it is ordinary time earnings and superannuation is payable on it. It is the single most commonly missed super line in termination pays.
Is super paid on unused annual leave paid out at termination?
No. The termination payout of accrued, untaken annual leave is excluded from ordinary time earnings. The same leave taken before the end date would have been superannuated; cashed out at exit, it is not.
Does redundancy pay attract super?
No. Genuine redundancy payments compensate for the position ending rather than for ordinary hours worked, and they carry no superannuation.
When is the super on a final pay due?
Within 7 business days of the termination payment, because the final pay date is a qualifying earnings day in its own right. A terminated employee has no next regular payday, so out-of-cycle fold-in does not apply. Authorise the contribution with the final pay rather than holding it for the next scheduled super run.
What happens if we paid super on the whole termination payment by mistake?
You have contributed more than was owed, and amounts paid into a fund in error are difficult to recover, generally requiring the fund’s processes and sometimes proving impossible in practice. Prevention through component classification is worth far more than the cure.
What happens if we missed super on the notice payment?
A shortfall exists from the final pay date, accruing notional earnings daily. Pay the contribution immediately and lodge a voluntary disclosure statement; handled promptly with a clean history, the administrative uplift can reduce to nil and the cost stays trivial.
Do these rules change for resignations versus dismissals versus redundancies?
The classification of each component is what matters, not the reason for departure. Any exit can include ordinary hours and leave payouts; dismissals and redundancies more often add in-lieu-of-notice and redundancy components. Run every final pay through the same component checklist regardless of how the employment ended.
Do I need to lodge STP for an off-cycle final pay?
Yes. Report the pay event on or before payment so the ATO’s liability feed matches the off-cycle reality. Off-cycle does not mean off-system.
Why are departed employees high risk for bounced super?
Fund details are often stale, and former staff are less likely to raise issues with the business directly. They are more likely to notice missing contributions later via a fund app and escalate externally. Week-one fund confirmation is the control.
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We review and check this guide periodically. At the time of writing (July 2026), all information was current. Scale Suite is a registered BAS Agent, not a licensed tax advisor or financial advisor. This content is general information only and does not constitute professional tax, financial, or legal advice. Some details may change over time.
Scale Suite is a Sydney-based provider of outsourced finance and HR services for Australian SMEs. We deliver bookkeeping, financial reporting, payroll processing, fractional CFO support, recruitment, employee onboarding, people and culture support, and fractional HR oversight, all as a fully embedded team that works inside your business.
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